Sales for retail and food services sales were up 0.3% for May compared to April and ahead of last year by 1.6%, the U.S. Census reports. Add to that to indications of strong early summer travel, an additional holiday – Juneteenth has become a public holiday in more than half the U.S. states – no interest rate hike by the Fed this month and lower gas prices than last year, and it translates into major optimism for consumer spending in June, Forbes reports.
In terms of where consumers spend their money, that has shifted to value chains, discount stores, travel, entertainment and groceries. Restaurants and bars were up percent and discount stores, warehouse clubs, and grocery stores were up 3 percent compared to May 2022. Groceries are a primary driver of customer visits to discount stores and warehouse clubs.
“Consumers are spending like they have a hole burning in their pocket,” Jonathan Silver, CEO of Affinity Solutions, which tracks spending on over 140 million credit and debit cards across 8.8 billion transactions, told Forbes. “May was the first month this year where spending was up in all categories except gas (and gas was way up after adjusting for price decreases). Our data shows consumer spending in the U.S. increased 8.9 percent year over year in May. That’s compared to 7.8 percent in April this year and just 1.8 percent in March. The increase in May is the largest monthly year-over-year spending increase since September 2022.”
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